ITEM NO.2                 COURT NO.5                SECTION III

             S U P R E M E   C O U R T   O F   I N D I A                            RECORD OF PROCEEDINGS                        Petition(s) for Special Leave to Appeal (Civil) No(s).14467/2007

(From the judgement and order dated 07/02/2007 in CERA No.14/2003 of the HIGH COURT OF JUDICATURE AT ALLAHABAD)

COMMISSIONER OF CUSTOMS & CENTRAL EXCISE            Petitioner(s)

                       VERSUS

M/S HONGO INDIA(P) LTD.& ANR.                       Respondent(s)

(With prayer for interim relief and office report) (FOR FINAL DISPOSAL)

Date: 04/12/2008  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE S.H. KAPADIA         HON'BLE MR. JUSTICE AFTAB ALAM

For Petitioner(s) Mr. Amey Nargolkar, Adv. Mr. Kunal Bahri, Adv. Mr. Kul Bharat, Adv. Mrs. Anil Katiyar, Adv.

                    Mr. B. Krishna Prasad, Adv.

For Respondent(s) Mr. Alok Yadav, Adv. Mr. M.P. Devanath, Adv.

          UPON hearing counsel the Court made the following                                O R D E R  

A short question which arises for determination in this Special Leave

Petition is: whether the High Court was entitled to condone the delay of 16 days in

filing the Reference Application by the Commissioner under Section 35H(1) of the

Central Excise Act, 1944?   

The High Court came to the conclusion,  vide its impugned judgment,

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that it has no power to condone the delay as there is no provision in the 1944 Act

to exclude impliedly or expressly the application of Section 29(2) of the Limitation

Act.

Learned counsel appearing on behalf of the Revenue contended that in

this case there was a delay in making the Reference Application under Section

35H(1) of the 1944 Act.  He further contended that under Section 35H, since the

Reference  Application  lay  to  the  High  Court,  the  said  Court  had  inherent

jurisdiction  to  condone  the  delay  and  the  analogy  drawn  by  the  impugned

judgment to Section 35, which refers to the power of the Commissioner under the

Act, would not be proper particularly when the jurisdiction of the High Court

cannot  be  compared  with  the  statutory  authority  of  the  Commissioner  under

Section 35 of the 1944 Act.   

At the very outset, it may be stated that in the case of Commissioner of

Central Excise,  Mumbai Vs.  Punjab Fibres Ltd., reported in 2008 (223) E.L.T.

337, a Division Bench of this Court has opined in a similar case that the High

Court has no power to condone the delay in the presentation of the Reference

Application  under  Section  35H(1)  of  the  1944  Act.   In  coming  to  the  said

conclusion, it has been held that Section 5 of the Limitation Act would not apply.

In this  connection,  reliance  was  placed on the provisions  of  Section  35 (which

refers to Appeals to the Commissioner under the 1944 Act).  Further, it has been

held that vested rights accrue in favour of the assessee and, consequently, a strict

view of the period of limitation prescribed under the 1944 Act should be applied.

Consequently, it has been held that the High Court had no authority to condone

the delay in the filing of the Reference Application under Section 35H(1) of the

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1944 Act.

With respect, we have doubts about the correctness of the judgment in

the  case  of  Punjab Fibres  Ltd. (supra).   Firstly,  it  may be  noted  that  we  are

concerned with the jurisdiction of the High Court and not the authority of the

Commissioner to condone the delay.  The Reference Application was required to

be made by the Commissioner to the High Court.  It was not required to be made

to  the  authority  under  the  Act.   The  powers  of  the  High  Court  were  not

circumscribed  by  the  statutory  provisions.   The  power  of  the  High  Court  to

condone  the  delay  cannot  be  circumscribed  by  the  provisions  of  Section  35.

Secondly,  in this case, we are concerned with the scope of Section 35H and not

with  Section  35  of  the  1944  Act.   Under  Section  35H,  on  an  application  for

reference, the High Court exercises its advisory jurisdiction in a case where it is of

the  opinion  that  the  substantial  question  of  law  of  public  importance  arises.

Therefore, in such a case, there is no question of a vested right accruing in favour

of either parties.

For the afore-stated reasons,  we direct the Office to keep this matter

before  the  Hon'ble  the  Chief  Justice  for  appropriate  directions  referring  this

matter to a larger Bench of this Court.

         (N. ANNAPURNA)       (MADHU SAXENA)         COURT MASTER     COURT MASTER

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